Energy consumption, capital expenditures, R&D cost and company profitability: evidence from paper and allied industry

  • Andrius Zuoza
  • Vaida Pilinkienė
Keywords: energy consumption, capital expenditures, R&D cost, company profitability, paper and allied industry


This paper aims to empirically examine the relations between energy consumption, R&D costs and capital expenditures on the profitability of manufacturing companies in the paper and allied industry. The main focus in this article is on the companies, which are operating in the manufacture of pulp from wood and the paper production industry. Multiple regression analysis was used to test if the energy consumption, R&D costs and capital expenditures significantly predict EBITDA profitability. The results of the regression analysis indicated that all used predictors explained (R2) 35.7% of the company profitability variance (R2 = 0.357, F (3; 80) = 14.82, p-value < 0.01). The performed regression analysis also shows that energy consumption has a significant contribution to the profitability of the company. The results also indicate that only energy consumption explains 12.1% of the profitability variance (R2 = 0.121, F (1; 101) = 13.86, p-value = 0.01). The results of the regression analysis show that EBITDA profitability will increase by about 3.7 · 10–7% for each 1 000 GJ energy consumed.